Wayne County Land Bank

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Wayne County Land Bank
T.U.R.B.O. Program
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Wayne County Land Bank
THE CHALLENGE
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DETROIT
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TAX REVERTED PROPERTIES
TAX REVERTED PROPERTIES
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TAX REVERTED PROPERTIES

TAX REVERTED PROPERTIES STATE LAND BANK PROPERTIES
MICHIGAN STATE LAND BANK PROPERTIES
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TAX REVERTED PROPERTIES STATE LAND BANK
PROPERTIES CITY OF DETROIT PROPERTIES
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TAX REVERTED PROPERTIES STATE LAND BANK
PROPERTIES CITY OF DETROIT PROPERTIES DPS
SCHOOL
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A CLOSER LOOK AT THE CHALLENGE
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DAVISON ELEMENTARY SCHOOL
PRIVATELY OWNED
CITY OWNED
TAX REVERTED
MICHIGAN LAND BANK
FORCLOSURE SALE
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CITY OWNED
DAVISON ELEMENTARY SCHOOL
TAX REVERTED
FORCLOSURE SALE
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PURPOSE

• The primary purpose of a Land Bank is to create a
  single, centralized body that can assemble,
  manage, cleanse title, and dispose of property in
  a coordinated fashion
• The Wayne County Land Bank was formed by Wayne
  County Executive Robert Ficano, Wayne County
  Treasurer Raymond Wojtowicz, and the Wayne County
  Commission and is a catalyst for investment,
  revitalization and rehabilitation in Wayne
  County.

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PURPOSE continued

• The Wayne County Land Bank administers programs
  designed to
• return vacant, abandoned and tax delinquent
  property to productive use and
• provide incentives to private owners to
  rehabilitate and develop their properties.
• The Wayne County Land Bank has access to unique
  tools including the ability to
• assemble and sell land
• accept and hold title to property
• hold property tax free
• facilitate the use of Brownfields
• borrow money
• Capture 50 of property taxes on Land Bank
  property

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LAND BANKS

• Can Never Condemn or Forcibly Take Property
  (Eminent Domain)
• Can Never Affect the Tax Foreclosure Process
• Can Never Levy taxes
• Can Never Bypass Local Zoning and Land Use Laws

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WHAT IS TURBO?

• Transforming
• Underdeveloped
• Residential
• Business
• Opportunities

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Authorization What Does TURBO Do?

• TURBO is a program of the Wayne County Land Bank.
• TURBO takes the benefits of Land Bank and
  provides meaningful financial incentives to
  private property owners who develop or
  rehabilitate unproductive land situated in Wayne
  County.
• The TURBO Benefit that the Investor will receive
  represents meaningful assistance with development
  expenditures incurred by the property owner in
  improving his or her property and transforming
  the property into a productive use.

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What Projects Qualify?

• Our goal is to assist as many Wayne County
  taxpayers as possible with development costs.
• Small and large projects can qualify for TURBO.
• In addition to serving as an effective economic
  development tool in distressed and underdeveloped
  communities, TURBO may also be used in wealthier
  communities.

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Where Can TURBO be Used?

• Anywhere within Wayne County
• Local units of government may also issue support
  letters for specific projects. This will allow
  the investor to receive a one-year tax exemption
  during the year of construction.

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Who Can Use TURBO?

• Anyone who owns property within Wayne County and
  is doing a development may qualify, including
• Commercial Residential Developers
• Landlords
• Community Development Corporations
• Faith-Based Organizations
• Businesses
• For-Profit and Non-Profit Developers
• Private Homeowners

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What Must the Owner Do?

• In order to be able to participate in the
  TURBO program, the property owner must commit to
  making an investment/improvement in their
  property that will result in a substantial
  increase in the taxable value of the property.
• This may include
• new construction
• complete rehabilitation, or
• substantial additions/improvements

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The TURBO Benefits

• Maximum TURBO Benefit
• Possible 1 year tax exemption during the year of
  construction
• 50 reimbursement of the real property taxes for
  5 years (i.e., partial reimbursement for
  improvements made to the property)
• Limited TURBO Benefit
• Reimbursement equal to 100 of the increased
  property taxes resulting from the improvement to
  the property.
• Brownfield Reimbursements
• Property placed in the land bank may be deemed a
  Brownfield
• 100 reimbursement of eligible Brownfield project
  costs

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TURBO Timeline

• November 15, 2007 Developer submits a TURBO
  Application Municipal Letter of Support
• December 1, 2007 TURBO application approved
• December 15, 2007 Execute Development Agreement
  and Deed conveying property to Land Bank
• January 15, 2008 Land Bank re-conveys property
  to Developer
• Year 2008 Construction year property taxes are
  exempt
• August 15, 2008 Development complete
• August 25, 2008 Developer receives TURBO
  Certificate (entitling Developer to be reimbursed
  in an amount equal to 50 of the real property
  taxes for years 2009-2014).

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Charlies TURBO Development (New Development)

• Investor buys land in Taylor for 300,000
• Annual property taxes 9,212
• Planned development 30,000 square foot retail
  shopping center
• Value of new shopping center 2,000,000
• New Property taxes 61,419 a year
• As a TURBO participant, Developer will save
• 9,212 construction year
• 30,709 each of the following 5 years (153,545)
• TURBO Savings 162,757

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KATES TURBO Development (New Development)

• Investor buys land in Taylor for 100,000
• Annual property taxes 3,071
• Planned development rental apartment building
• Value of apartment building 660,000
• New property taxes 20,473 a year
• As a TURBO participant, Developer will save
• 3,071 construction year
• 10,237 each of the following 5 years (51,185)
• TURBO Savings 54,256

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Limited TURBO Benefit (For Partial
Expansions/Improvements)

• If you make substantial improvements to your
  property, you may qualify for a financial benefit
  in an amount equal to 100 of the increase in the
  property tax assessment, representing the
  improvements.
• The 100 financial benefit for the increased
  property taxes will occur over a 5 year period.
• Expansions/improvements can occur to residential,
  commercial or industrial structures.

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Community Groups TURBO Development (Partial
Improvements/Expansion)

• Community Group buys old building in Taylor for
  300,000
• Annual property taxes 9,213
• Value after partial improvement/expansion
  450,000
• New property taxes 13,818 a year
• Increase in annual property taxes 4,606
  (13,818 - 9,213)
• As a TURBO participant, Community Group will
  receive a TURBO Benefit of
• 4,606 each year for the next 5 years.
• TURBO Savings 23,030

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LAND BANK BROWNFIELD DEVELOPMENT

• Goal Maximize the usefulness of Brownfield
  tools when combined with the land banks
  flexibility and incentives.
• Goal Streamline the Brownfield application
  process, make it easier to understand and shorten
  the approval process.
• Goal Create synergy by working with local and
  state agencies to streamline the approval process
  and make the process more cost effective to the
  end user/developer.

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TURBO Brownfield Development

• Property placed in the Land Bank may be a
  Brownfield
• Land Bank property may qualify as a Brownfield
  under
• various scenarios
• Tax reverted property within the land banks
  control or ownership, or
• 2. Non-tax reverted property within the land
  banks control or ownership if it is
• (a) situated in a non-core community, and
  contaminated,
• or
• (b) situated in a core community and is
  blighted or functionally obsolete.

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Eligible Brownfield Activities

• Potential Eligible Brownfield Expenses
• Environmental Assessment and Clean-up Activities
• Demolition
• Lead and Asbestos Abatement
• Site Preparation
• Infrastructure Improvements
• Obtaining Clear Title

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Brownfield Example

• Purchase price contaminated vacant building
  300,000
• Annual property taxes 9,212
• Demolition, remediation infrastructure
  230,000 (Brownfield Eligible Expenses)
• Under the Simple Reimbursement Program the
  investor received
• (One Year Tax Exempt) 9,212
• (TURBO Reimbursement) 153,547
• 162,759
• Under the Brownfield route the Investor may
  receive
• (One Year Tax Exempt)
  9,212
• (TURBO Reimbursement)
  153,547
• (Brownfield Reimbursement)
  230,000
• TURBO Brownfield Savings 392,759
• Although more time consuming, costly, and
  administratively burdensome, the increased
  benefits may justify using the brownfield route.

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How Do I Start the Process?

• Call the Wayne County Land Bank today to discuss
  your project and to get a TURBO application!
• Questions or comments
• Turkia Mullin
• [phone]
• Or
• tmullin_at_co.wayne.mi.us
• www.waynecounty.com/landbank